THE NEW FAIR CREDIT REPORTING ACT COMPLIANCE
The Fair Credit Reporting Act governs not just credit reporting, but
all employment background checks you obtain from a consumer reporting
agency like Com
Quest. While the new law is designed to protect the privacy rights of
individuals, it clearly recognizes pre-employment screening as an
purpose to protect the workplace. Therefore, amendments taking affect
immediately have added new requirements on the use of consumer reports
In brief, as a user of background reports for employment screening,
there are new steps you will need to follow:
Disclosure: Each applicant must be given a clear, written statement
indication that a background report will be ordered.
Release: You must obtain a separate release authorizing this
Applicant Notice: If you decide not to hire based on information in
the report, you are required to notify the applicant before taking
this action, provide the
applicant a copy of the report and a copy of the Summary of Your
Rights Under the FCRA.
Certification: You must certify to Com Quest that reports are used for
employment purposes and that you are following the above procedures.
is part of the Com Quest User Agreement.
Obsolete Information: The new law requires that reports containing
information more than seven years old may only be obtained if the
consumer will be
employed at an annual salary of $75,000 or more. This is an increase
from the $20,000 salary requirement in the previous law.
We will provide you with several documents to aid in compliance with
the FCRA regulations. They are:
1. Notice to Users of Consumer Reports: Obligations of Users Under the
This is the official document from the Federal Trade Commission
summarizing your obligations as a user of consumer reports. Please
Read this and put it in
2. Disclosures & Release
We will provide you a sample disclosure and release form. We suggest
you give this form to the applicant and obtain a signature. Then make
a copy for your
records and give the original and a copy of the Summary of Rights to
the applicant. The release is for your records; it is not sent to Com
3. Disclosure for Investigative Report
If you are ordering a reference check, known under the law as an
investigative report, this disclosure must be given to the applicant
with a copy of the Summary
of Your Rights.
4. Adverse Action Letter
Under the law, "adverse action" is defined as a denial of employment.
This letter - or one similar to it - must be sent to the applicant if
you are denying
employment based in whole or in part on any information contained in a
background report. You must include with the letter a copy of the
report you have
received from Com Quest and a copy of the Summary of Your Rights.
5. A Summary of Your Rights Under the Fair Credit Reporting Act
This document must be given to the applicant at the time you provide
the disclosure that you are ordering a background report and also with
a copy of the
report if you decide not to hire based on information in the report.
You may make copies of this document for your use.
6. Authorized Access Agreement
Since the law imposes potentially severe penalties on persons who
obtain reports without having a permissible purpose, Com Quest
suggests you adopt strict
procedures regarding which employees have the ability and authority to
access Com Quest reports. We also suggest you have employees sign this
that the employee is aware of the confidential nature of the
information and the penalties for violating the law. This document
should be kept in your files.
If you have questions about compliance or if we
can be of assistance to you in defining your new procedures, please
contact us. Our customer
service personnel will be happy to assist you.